Camden Sells $1.63B Calif. Portfolio, Eyes Sun Belt Growth

Strategic Shift Out of California

Camden Property Trust spent months preparing its California exit. Bisnow reports the Houston-based multifamily REIT listed 11 California properties in January 2026. The company cited rising regulatory costs and stronger opportunities in business-friendly markets.

The portfolio sold for $1.63B, exceeding the initial asking price. It includes 3,620 units across Los Angeles-Orange County and San Diego-Inland Empire. Meanwhile, institutional investors continue reducing exposure to high-tax coastal markets. Many now favor the Sun Belt, continuing a trend that accelerated after the pandemic.

The Details

The portfolio sold for about $450K per unit. That price stands out despite California’s rent regulations and rising operating costs. JLL marketed the portfolio with an initial asking price of $1.5B. The buyer has not been identified publicly.

CEO Alex Jessett said the proceeds met expectations. Camden plans to fund Sun Belt acquisitions and reduce debt through 1031 exchanges. CFO Ben Fraker also highlighted share repurchases and investments in growth markets. During Q2, Camden acquired five apartment communities and two infill parcels for $645.4M. Those investments span Texas, Arizona, Georgia, Florida, Tennessee, and North Carolina.

West Coast Divestments Amid Growing Sun Belt Pipeline

Camden’s move reflects a broader shift among large multifamily owners. Many continue reducing California exposure because regulations and development hurdles pressure operating margins. Don Peebles of The Peebles Corp. called California the country’s most difficult place to do business during a 2025 interview.

Camden’s results highlight those pressures. Same-store NOI fell 1.4% year over year in Q2 2026. Adjusted FFO declined 8% from 2025. Still, portfolio occupancy remained strong at 95.7%, showing steady demand. Meanwhile, Wood Developers also shifted toward the Sun Belt. Los Angeles still recorded more than 4,000 multifamily starts in Q1 2026, its strongest quarter since 2022.

Why It Matters

Camden’s $1.63B sale ranks among the year’s largest West Coast multifamily transactions. It also reinforces capital’s shift away from legacy coastal markets. Jessett estimated new regulations would have reduced annual NOI by about 80 basis points if Camden kept the assets.

Tax burdens, rent control, and operating costs continue driving investment decisions. CBRE’s 2026 Multifamily Investment Report showed Sun Belt deal volume increased 22% year over year. Camden also bought 2,061 units in high-growth markets, reinforcing its long-term strategy. The company’s improving supply outlook in several core markets also supports expectations for stronger operating performance during the second half of 2026. In addition, Camden repurchased 1.4M shares below NAV and still has $298M available for buybacks.

Stable vacancies and changing construction patterns could reshape market pricing and liquidity. Los Angeles remains an active development market. However, investors continue demanding higher returns for West Coast assets while directing more capital into the Sun Belt.

What’s Next

Camden plans to reinvest much of the sale proceeds through 1031 exchanges. The company expects to expand further across target Sun Belt markets during 2026. It still owns 167 properties totaling 56,695 units and has three projects under development.

More institutional owners may reduce exposure to highly regulated markets if current conditions persist. Camden could announce additional acquisitions or asset sales before year-end. At the same time, Sun Belt markets will likely continue attracting a growing share of investment capital.